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In business management, it is necessary to make use of theoretical knowledge by studying its application in practical studies. As an example of such a study, one may use the article of Siew, Fai, and Hoe (2016) entitled “Evaluation on the efficiency of healthcare companies in Malaysia with Data Envelopment Analysis model”. The research uses the DEA model and the basic terms of asset and liability to determine the efficiency of several Malaysian healthcare institutions. By reviewing the article, it would be possible to showcase the deployment of the financial terms, and the value of the study for healthcare in Malaysia and worldwide.
The article challenges the task of evaluating the “hospital efficiency” of Malaysian organizations such as Adventa, Ahealth, and others (Siew et al., 2016, p. 96). For completion, the researchers evaluate the companies by the mathematical model of DEA. The method, successfully proven in other European countries by previous studies, compares the output and the input of the firms. The asset and liability of the companies play a vital role in defining the input part. In the end, the authors conclude that Adventa and Ahealth companies have shown their worth as the most efficient ones among Malaysian healthcare organizations.
While the study does not explicitly elaborate on the terms of asset and liability, it proficiently applies these concepts to prove the main points. If one uses the supplementary sources, according to Rhee (2016), the asset can be described as the possible benefit for the company, while the liability is explained as a potential sacrifice. In other words, the ratio of asset and accountability is to be maintained if the firm attempts to keep its efficiency at a high level.
The article demonstrates a similar understanding of the terms and puts them into the text already with the meaning conceptualized. The chosen model of DEA aids in this regard since the evaluation of the input would be impossible to conduct without resorting to the asset-liability ratio. Moreover, the researchers directly state that “the inputs identified in this study are total asset and total liability” (Siew et al., 2016, p. 100). Hence, the asset-liability balance becomes a critical tool in the model for assessing the successes of Malaysian healthcare companies.
The article profoundly builds an elaborate strategy for both explaining the value of the DEA system and the results of the chosen organizations’ group. Firstly, it emphasizes that the model already showed formidable promise by analyzing the performance of national business organizations in various countries. Secondly, it proceeds with the research on the Malaysian field, and input-output calculation leads to the logical conclusion which companies excel. The healthcare sphere could gain enough benefit from that kind of study since the researchers have usually focused on the model application in developed countries. Hence, the article presents the possibility of assessing the efficiency of the healthcare sector in developing and underdeveloped states as a means for improvement.
The authors make a strong point about the future role of the research for enhancing the healthcare market in countries like Malaysia. According to them, the efficiency of the healthcare system is directly tied to the quality of life and medical services (Siew et al., 2016). Thus, the point emphasizes the worth of both the study itself and the future study in health economics. After all, business and health tend to intertwine, which is why the former’s methods can be used for the latter’s development.
To sum up, the article of Siew et al. (2016) evaluates the efficiency of Malaysian healthcare organizations through the DEA model, successfully proven by other researchers. As a result, the research shows the worth of several companies — Adventa and Ahealth. To complete the task, the scientists proficiently deployed the asset-liability ratio to determine the exact input of each company. The value of the research can be explained by the skilled structure of arguments and the necessity of such studies regarding healthcare in underdeveloped countries. Moreover, the authors themselves note that their work is linked with the state of the healthcare sphere in Malaysia.
Rhee, R. J. (2016). Corporate finance. Toronto, Canada: Wolters Kluwer Law & Business.
Siew, L. W., Fai, L. K., & Hoe, L. W. (2016). Evaluation on the efficiency of healthcare companies in Malaysia with Data Envelopment Analysis model. SCIREA Journal of Mathematics, 1(1), 95-106.